Putting Albert Pujols' new contract in context
Drinks today are on Albert Pujols.
According to ESPN’s Buster Olney, the free agent slugger has just signed a ten-year deal with the Los Angeles Angels, worth “at least” $250 million. His former team, the St. Louis Cardinals, is now left holding the bag.
Yet while this isn’t business news, and you don’t need EverydayMoney.ca to tell you $250 mil is a lot, Pujols’ contract nonetheless puts him in a salary category nearly all his own.
Meaning, in terms of earning power, only the most egregiously compensated CEOs can catch him now.
To offer a bit of context on Pujols’ massive reported deal, we first look, of course, with how it compares to other contracts in North American sports.
*Bing: How old is Albert Pujols?
For argument’s sake, we’ll keep the first baseman’s payout at $250 million, though the final terms have not yet been released. Remarkably, it’s only the third-highest contract ever signed by a baseball player; Alex Rodriguez owns the top two spots, with his $252 million and $275 million deals signed in 2001 and 2008, respectively. (Rodriguez opted out of his first contract, a ten-year deal, after seven years to sign a ten-year extension in 2008. The total value of the contracts is in the $450 million range over 17 years.)
Still, Pujols is also the owner of a previous $100-plus million contract, the one he signed with St. Louis in 2004 – a seven-year pact worth exactly $100 million.
How elite of company is that? In the history of the four major North American sports, Pujols becomes just the fourth athlete to have signed two $100-million plus contracts, joining A-Rod, Shaquille O’Neal ($120 million with the Lakers in 1996, $100 million with the Heat in 2005) and Michael Vick ($130 million, of which much was vacated after his prison stint on dog fighting charges, with the Falcons in 2005, $100 million with the Eagles this year).
Naturally, in the era of ballooning executive salaries and general “CEOs are scum” sentiment, we’d like to find a way to compare Pujols’ deal with what the world’s top businessmen rake in.
Certainly, compensation is much different for sports stars than CEOs, who are feted with heaps of stock options and company shares in addition to hefty cash salaries. But let’s use Lloyd Blankfein, perhaps the most rued executive today, as a measuring stick against baseball’s best player.
The Goldman Sachs CEO has been at the top spot at his bank since 2006, a remarkably lucrative stretch for the Wall Street boss. In 2006, he earned $54 million ($600,000 base salary, $53.4 million bonus); in 2007, he earned $68.6 million ($600,000 base salary, $68 million bonus); in 2008, and here’s where things start to come back to earth, he earned $1.11 million ($600,000 base salary, about $500,000 in bonuses); in 2009, he earned $9.6 million ($600,000 base salary, $9 million bonus) and in 2010, he earned $14.6 million ($2 million base salary, $12.6 million bonus).
Now, of course, much of Blankfein’s compensation is not cash, and it’s with that caveat we go forward comparing his earnings to what Albert Pujols will make.
Yet even factoring in the Goldman Sachs boss’ 2008 recession-led pay cut and diminished handouts the following two years, he’s still earned some $29.5 million, on average, over his first five years in charge of the investment bank.
How’s that rank? If Pujols’ $250 million deal is to be believed, at $25 million a year, not even baseball’s greatest contemporary name can measure up to Wall Street’s top boss.
By Jason Buckland, MSN Money